Intermediate Low in Markets...

Our proprietary technical indicators have shown a blow off low in the markets, we were strong buyers of index option positions in todays low. Other leading bear index indicators, such as the XHB have shown higher lows in this last instance of selling pressure. HOV and some of those stocks seem to be forming bases here. We still have the fall to get through for an indication of where the final low is in this market, but if you have been short, this is the area to close the positions and look for short term long plays.

Fundamentally, this has been a tough market to trade if your not a technicial. The Goverments continued involvement is akin to the LTC 1998 currency crisis of international goverments years ago. As we have stated for years, the goverment and central banks will DO EVERYTHING in their power to not see the markets collapse or systematic risk. The patient is still sick, we are overal still bearish as there is more time to deal with the problems that are yet to come, AND the international slowdown that is starting to happen. Keep in mind international markets and the dollar hit oversold levels this week as well. 100 yen is major (intervention) support for the dollar. Look for reversals in the dollar, crude, and gold in this time zone. Now back to our trading screens.